Nothing happened, thankfully say I

Well, I’m a back after three weeks away from work helping to look after our newborn baby girl and trying to keep up with the chaos created continuously by our two-year-old and three-and-a-half year old daughters.

While most of you, in readiness for spring, have been busy working on the Big Iron, I’ve been busy working on the Small Diapers.

I was worried that the markets would have moved violently in some direction while I was off, because that’s what usually happens. I hate missing all the action. But, for the second time this year, that didn’t happen. Perhaps that once predictable chart pattern is changing. The markets for crops and meat seem to have spent the last three weeks trying to stay level, trying to figure out which way to go.

The world, in fact, seemed to me during these weeks to have gone flattish. After the violence and drama of March, with war in Libya and disasters in Japan and confrontations in Parliament, April’s seemed to not know which way to go. Libya’s begun to drag on, slipping into a slow grind of a war of attrition. Japan’s limping along and the nuclear problems don’t seem worse, but don’t seem better either. And the Federal election campaign seemed to proceed in a dull manner until a few days ago, when Jack Layton finally found his mojo and Stephen Harper found a chance to actually believe in a majority result.

Whither crops from here? They certainly seem to have fallen into a comfortable rut in recent weeks, as these charts show.

Six months canola

Six months canola

Six months oats

Six months oats

Six months spring wheat

Six months spring wheat

Six months soybeans

Six months soybeans

Six months corn

Six months corn

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Which way from here? Some specific price moves for Canadian crops like canola and oats are likely from tomorrow’s StatsCan seeding intentions report, but the overall commodities and crops complex is what’s going to make up 80 percent of the value of our crops, so that’s the vital question: what happens to the longer term commodity and crop market rallies that we’ve been experiencing?

There are no obvious signs of reversal right now, although the March dips looked very threatening on the charts. Crops like wheat and oats, and meats like pork, still look like they’re in the bullish channel, or not too far from it.

One year canola

One year canola

One year spring wheat

One year spring wheat

One year lean hogs

One year lean hogs

We seem to have been sitting in some spring doldrums, but while March was scary and April has been uninspiring, there’s no reason to think a spring rally can’t break us out of it. Demand is still out there, crop tightness is still out there, we usually get a spring rally. QE2 is still being perpetrated by the U.S. Fed, and China still hasn’t thrown enough sand into its economic gears to make its economy seize up.

So, as the Red River crests here in Manitoba, and the oceans of water from eastern Saskatchewan pour down the Assiniboine River three blocks from my house, I will allow myself to once more believe the continuing crop market rally is still alive, and look forward to the next leg upwards beginning soon.

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